NANO MBA3 Category Management by kongkiat phanawadee


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Category Management for My Drug Store
By Kongkiat Phanawadee
Panyapiwat Market and Consumer Behavior Learning Center
Panyapiwat Institute of Management
24 February 2013

Published in: Business

NANO MBA3 Category Management by kongkiat phanawadee

  1. 1. Category Management for My Drug Store By Kongkiat Phanawadee Panyapiwat Market and Consumer Behavior Learning Center Panyapiwat Institute of 24 February
  2. 2. Today’s Agenda• Category Management Concept Review• Assessment of Drug Store’s Shopper• How to apply Category Management to Drug Store
  3. 3. Retailer Strategy• Defining the Retailer Strategy is an activity that should be conducted by every Retailer• It identifies the drivers of the Retailers Strategy and includes a complete Cross Category Analysis• This analysis includes assigning Category roles and resources
  4. 4. What Are Retailers Looking For ?• A better understanding of their shoppers, and the market in which they operate• Suppliers who can provide, interpret and apply this information
  5. 5. What are important to Shopper ?• Convenience -----> Location• Assortment -----> Product  Carried  Availability• Service• Advise -----> Trust• Environment• Price
  6. 6. Why work together?• To achieve a common goal. This is typically referred to as Category Partnering.• Retailers and suppliers have different information and expertise: – Buyers manage an average ??? categories – Suppliers have teams of experts for a few categories Retailers Suppliers Point Of Sale Consumer Data Financial Data Market Data Costing Data Trending Data Product Supply Data Expertise
  7. 7. Category Management Business Process Category definition Category role Category assessment Evaluation Scorecard Category strategy Category tacticsECR Best Practice Model Implementation
  9. 9. Assigning Role to a Category• Having analysed a category relevant to others, we can then assign a “role” to that category.• The category roles are: – Destination Discussion on – Routine Destination of a – Occasional few retailers – Convenience
  10. 10. Typical Category Role• DESTINATION – Primary category provider to the target consumer. – Assist in defining the target consumer’s image of the store. – Deliver consistent superior value to target consumer – Lead all retailer categories in areas of Sales, Market share, Consumer satisfaction, service level and operating expense management. – Lead all resources toward achieving corporate mission, goals and strategies.
  11. 11. Typical Category Role• ROUTINE – Preferred category provider – Assist in building image of the store – Deliver consistent, competitive value – Deliver balanced results across all areas of scorecard. – Play a primary role in delivering Profit, cash flow and ROA.
  12. 12. Typical Category Role• OCCASIONAL/SEASONAL – Major category provider to the target consumer. – Assist in reinforcing the image of the store. – Deliver frequent competitive value to target consumer – Play a secondary role in delivering Profit and cash flow
  13. 13. Typical Category Role• CONVENIENCE – Reinforce image of the store for one-stop shopping – Deliver excellent, everyday value to the target consumer – Play an important role in the area of profit generation and margin enhancement.
  14. 14. Category Assessment - Obtain The Data MARKET DATA -Retail Tracking Data -Key Account Data -In-Store Audit CONSUMER DATARETAILER DATA - Consumer Decision Tree- Scanning Data - Shopper Research- Loyalty Card - Consumer Panel- Space Planning Data SUPPLIER DATA - Promotional / Advertising - Delivery Schedule - New Product Launch Plans
  15. 15. Category Scorecard DEFINITION • Reflects the Current ROLE Status & DesiredCATEGORY REVIEW ASSESSMENT State (target CATEGORY SCORECARD objectives) STRATEGIES • Measures & TACTICS monitors IMPLEMENTATION performance against targets
  16. 16. CATEGORY STRATEGIESCategory’s strategy defines how a category drives chain’s overall strategy and target Traffic builder Strategies are determined by theTransaction builder retailer Profit generator Cash generator Image builder Turf protectionExcitement Creator
  17. 17. Category Tactics• Considering Category Strategy and Score Card – Assortment Review – Space Planning – Price and Promotion
  18. 18. Creating the AssortmentCategory StrategyAssortment Tactics ImpliedTraffic Building Brand selection consistent with market leadershipTransaction Building larger sizes, Add higher priced product AddCash GeneratingDelete slowest moving of productsProfit GeneratingAdd higher priced products or delete low priced products Add high margin products or delete low margin products Add high turn products or delete low turn productsExcitement Creating new products promptly, change Add assortment seasonallyImage Enhacing Add products consistent with image
  19. 19. Space Planning Visual InventoryMerchandising Management
  20. 20. What is SPACEMAN Planogram?A planogram is a graphical representation of store and product data
  21. 21. Challenges on Price and Promotion• Can I increase my price without losing sales? – What will be the impact on my Share, Volume and Profit – Cannibalization and Competitive steal – Optimal price strategy• Which are the most effective promotions (mix) to use for my brand? – What promotion mix works best? – Effects of a competitive campaign to my brands?• How much will I grow if I increase my distribution / use promotions etc.• How successful is my new product, who suffers when I launch a new product
  22. 22. Implementation Category definition Category role • Well-developed business plans poorly executed doEvaluation Category assessment not deliver either Scorecard consumer value or Category strategy results Category tactics Implementation
  23. 23. Monitor & Review• Does the Category meet the objectives set ?• What worked within the plan, what did not work ? – Review using Market Data and Scanning Data. – Check objectives achieved in Test v Control Stores. – Consumer reaction to new Category Plan - Questionnaire.
  24. 24. Category Management Business Process Category definition Category role Category assessment Evaluation Scorecard Category strategy Category tacticsECR Best Practice Model Implementation
  25. 25. Assessment of Drug Store’s Shopper
  26. 26. Methodology• Qualitative Research – Explore insight from your customers mind – Speak right from their hearts• 2 Groups, Nov 2012, Bangkok – Male / Female – Age; 28 – 40 – Socio-Economic Status; C, B – Career; Employee, Businessman, Government officer, Freelance
  27. 27. Understand your customers needs by OccasionOccasion Key value Self Care ConvenienceSpecial Care Advice / Service / Trust Big lot Price Driven / One Stop Solution
  28. 28. Self Care• Consumer focus on Convenience or Immediate need• Overcharge is possible but led to unpleasant experience and unlikely to visit again unless necessary
  29. 29. Special Care• Consumers rely on their Trust to the outlet• Trust has built on their experience by – Advice from Pharmacist or Store keeper – Impression at first sight – Ultimate service – Result
  30. 30. Big Lot Purchaser• Consumers concern on Price• “Klang Ya” is a well known outlet for “cheaper price” and “one stop solution”• However, unsatisfied service and long queue
  31. 31. Some quote“เวลาปรึ กษาเรื่ องยาเค้ าก็จะพูดได้ แบบ ... บางทีเคยเอายาที่หาหมอที่คลีนิคอะไรอย่ างนี ้ ไปถามเค้ า บางตัวมันซาซ้ อน อย่ างตัวนีแก้ ไอ ้ ้ตัวนีกแก้ ไอ เหมือนเค้ าให้ เรากินยาหลาย ๆ อย่ างเพื่อที่อาการจะได้ ้็หายเร็ ว ๆ เค้ าแนะนาว่ าตัวนีถ้าไม่ มีอาการไม่ ต้องกินก็ได้ แต่ คลีนิค ้เค้ าไม่ ได้ เขียนบอกเรา” “เหมือนเราเชื่ อใจไปแล้ วว่ าร้ านนีดี แนะนาดี ถูก ตัวอื่นที่มี ้ ก็ต้องดีและถูก และคาแนะนาที่เค้ าให้ เราก็เลยเชื่ อใจ”
  32. 32. Parking lot is considered as an important attribute to Convenience“อีกอย่ างที่จอดรถด้ วย บางทีติดถนนเกินไม่ มีที่จอดรถ ก็ไปซื ้อที่อื่นดีกว่ า ไปซื ้อในห้ างที่เค้ ามีที่จอดรถดีกว่ า เราไม่ ต้องมารี บให้ คนอื่นบีบแตร” “มีที่จอดรถสะดวก พอถึงเวลาแล้ วจอดได้ เลย ถึงคุณจะเป็ น ตึก แต่ คุณก็ต้องล็อคไว้ สาหรั บคนที่มาร้ านยา”
  33. 33. Some Quote “เภสัชกรสาคัญมาก แต่ กร้ ู ว่าอาจจะไม่ ได้ อยู่ตลอดเวลา ... คนที่อยู่ในร้ าน ็ ให้ ความมันใจได้ ไหม” ่“จะเภสัชหรื อไม่ ใช่ เภสัชไม่ ใช่ พ้อยซ์ แต่ คุณรู้ หรื อเปล่ าว่ าคุณจะให้ อะไรผม” “จังหวะที่คุยสองสามคาแรก ถ้ าดูหน้ าแล้ วไม่ สร้ างความเชื่ อถือ ก็ .....”
  34. 34. May be not just only for Drug Store• Waiting for too long without any attention – Only 2 minutes considered to be too long – If the Pharmacist does not available, the Assistant need to be intervene – Then complete brief to the Pharmacist• Unreliable – Operating time (opening / closing) • Close at 22:00 sounds good ! – Just “Out of stock” without any detail or solution
  35. 35. Surely, Medical Appliance Segregative display would be preferred• Health and Beauty – Vitamins, Supplementary food – Herbal medicine, Dietary products• Optional for Grocery – Even “Cheaper Price” will normally not attract enough – Can I try? …Yes… but start with limit categories
  36. 36. I dream for A Drug Store with…• 2 Blocks will provide enough space to my sight – Only 1 Block will block me out• Hygienic feel – Bright luminance – Clean and Clear (well organize) – No dust• Airy atmosphere (neither too loose nor too tight) – Wider than its depth – Enough space for aisle – Transparency look
  37. 37. I dream for a Drug Store which …• Enough pharmacist (s) who care about me – Advise me on suitable medicine and usage – Let me have some appropriate choice – Tell me the side effect – But do not rush me or pressure me, give me a break• I can wait for up to 2 minutes, to please me… I need your assistant who willing to serve me – Pay attention to my needs – Help me explain to the pharmacist when available
  38. 38. I dream for a Drug Store where …• I can find what I want with reasonable price• Provide some space that I can choose “Self Care” / health & beauty on my own – I expect some variety and product range that I can make a mini-shopping – Be prompt to advice me on appropriate timing• If you cannot open for 24 Hours, can you close at 22:00 please?
  39. 39. Some more idea from the dream• Store name can be Thai or English but should sounds trusty and be modern – A fine logo will differentiate your store in my acknowledgement• I love Blue / White color tone for your signage – Green does fine but quite simple• A computer to record my purchase and symptom – Recall my record to follow up or assess my condition – Provide knowledge or some useful tips
  40. 40. An Example for ApplyingCategory Management to My Drug Store
  41. 41. My Drug Store Strategy - ตัวอย่ าง• เป็ นร้ านยาที่ให้ ความสะดวกแก่ ชุมชนรอบข้ างร้ าน Convenience• เป็ นที่พ่ งของชุมชนในการให้ คาปรึกษาและแนะนาเพื่อสุขภาพที่ดี ึ ของลูกค้ าในชุมชน Advice / Trust• ไม่ ค้ากาไรเกินควร Reasonable Price
  42. 42. Assigning Role to a Category - ตัวอย่ าง • Destination  Special Care Occasion • Routine  Self Care Occasion • Occasional  Special Event .....  Education Exam period • Convenience  Urgent needs
  43. 43. Assigning Role to a Category - ตัวอย่ าง • Destination – Special Care Occasion  Service and Advice quality  กิริยาท่าทางการให้ บริการ มีความใส่ใจ  ช่วยลูกค้ าในการตัดสินใจซื ้อยาตามสมควร  Effective two-way communication  Varieties ของยา  Pricing ?
  44. 44. Assigning Role to a Category - ตัวอย่ าง • Routine - Self Care Occasion  Varieties for self-service ทังยี่ห้อ, ขนาด ้  ตัวขายดีราคาชนคูเ่ ทียบ  จัดสินค้ าให้ สะอาดเรี ยบร้ อย พร้ อมขาย ของไม่ขาด
  45. 45. Assigning Role to a Category - ตัวอย่ าง • Occasional – ตามเหตุการณ์  ช่วงอากาศเปลี่ยน แจกเอกสารให้ ความรู้ในการดูแลตัวเอง และเพิ่ม การจัดเรี ยงของวิตามินซี, Vics  ใกล้ สอบ เพิ่มชันวางสินค้ าบารุงสมองให้ เด่น ้ • Convenience  Ensure top items available  Maintain price gap to competition
  46. 46. In Summary.....• To response to more complicated shopper demand in Thailand – Identify your own strategy to be focused • Convenience, Price, or Trust • Could be more than one strategy – Ensure comfortable shopping atmosphere • For Self Care and Special Care shopping occasions – To identify category roles will help more focused category plan • Destination / Routine / Occasional / Convenience – Ongoing learning from your Customer • Monitor and adjust over time
  47. 47. Thank You Q&A